Endothelial progenitor cell (EPC) dysfunction may have a key role in the pathogenesis of DR. Two populations of EPCs that arise from cultured mononuclear cells (MNC) are the late outgrowth endothelial cells (OECs), which display a clonal phenotype and belong to a CD34+CD45- population; and early EPCs (eEPCs) which exhibit a monocyte phenotype (CD14+/CD45+) but demonstrate endothelial-like markers and behavior in vitro and in vivo. To address the role of these cells in diabetic retinopathy (DR) we hypothesized that in DR, eEPCs remain as the central modulator of the OECs; however, the OEC population is transiently lost in nonproliferative diabetic retinopathy (NPDR) but it reappears as a more aggressive and proliferative population which triggers the angiogenic switch and the onset of proliferative (PDR). The eEPC population, in contrast, never disappears entirely but rather shifts in its level of activity, being more inflammatory in PDR and less in NPDR. In both populations, dysregulation of nitric oxide synthase (NOS) is central to these phenotypic transitions, which are further influenced by the changing bone marrow (BM) microenvironment. We are testing this hypothesis by the following aims: Specific Aim 1: To test whether the proliferative potential of eEPCs and OECs depends on the stage of retinopathy and determine whether eEPCs and OECs isolated from diabetic individuals produce more reactive oxygen species, contain more endogenous NOS inhibitors, and secrete a distinct cytokine profile than cells from controls. Specific Aim 2: To test whether the combination of nondiabetic (healthy) eEPCs and OECs will have a greater reparative function then either population alone in models of retinal ischemia-reperfusion injury or in acellular capillaries in diabetic SCID mice. Specific Aim 3: To test whether eEPC and OEC dysfunction in diabetes is due to defects (increased adiposity, reduced hematopoiesis and progenitor dysfunction) in the BM microenvironment. These studies will allow us to determine whether eEPCs and OECs represent ideal progenitor populations for cellular therapy to improve the health of the vasculature in the diabetic eye.